The impact of remittances on human capital investment in Thai households

This paper investigates the impact of remittance income on a continuation to study in upper-secondary education in Thailand using data from the Household Socio-Economic Survey from 2015 to 2021. This paper employs an instrumental variable Probit to take into account the endogeneity problem that arises from remittance income. The result shows that maternal education, total household expenditure and total household assets are key determinants of a continuation to study in upper-secondary education. Furthermore, remittance income lowers the probability of a child enrolling in upper-secondary education. The total household assets could provide access to other means of financial support. This paper also studies the relationship between remittance income and education expenditure in Thai households. Engel curves are estimated using the Tobit model with left-censoring data to account for the ordinary least squares estimation bias. The results show that remittance positively influences the likelihood that households spend on education. Remittance-receiving households consider education as a necessity commodity and the elasticity varies across income quintiles. Finally, the results also show a gender bias toward female students. Policymakers are advised to lower the costs of transition to upper-secondary education, provide an asset-building scheme to all households, and ensure sufficient support for low-asset households.